Veteran crypto investor Arthur Cheong believes that deep recessions and multi-year bear markets for digital assets could be a thing of the past.
The CEO of DeFiance Capital tells his 169,400 followers on the social media platform
“Nuanced view: It is entirely possible that the crypto market is maturing and we will not see complex wild swings with a 70-80% drop every two years, but instead a complex, secular growth like what the S&P 500 experienced after the GFC of 2008 (Great Financial Crisis). ).
If we ignore the Covid-19 crash in 2020, the US stock market will either reach a level or gradually decline, with any bear calling for a major crash proven wrong, but returns also increasingly concentrate on the big cap and mega caps, while value and small caps remain unloved. a long time.”
Cheong says that if his thesis becomes reality, future bull markets will no longer serve as a tidal wave that lifts all boats, suggesting that most altcoins will not experience massive rallies similar to what was seen in previous cycles.
“If similar things happen, most alts would be uninvestable, but some winners will deliver game-changing returns and hopefully we’ll get an Nvidia-like result every few years, while most alts will disappoint.”
Also the seasoned crypto investor notes that altcoins will have to forge their own path if they want to succeed.
“You also cannot ignore the fact that the market is path dependent; there is no such thing as predestined. If there is mass adoption, like Telegram transferring half of their user base to TON, how much do you think TON will be worth?”
But for now, Cheong thinks that market conditions for crypto are about to improve. Him too believes that both Bitcoin (BTC) and Ethereum (ETH) are undervalued, as they are the only two digital assets without regulation.
“I think the market still hasn’t priced in the fact that BTC and ETH are the only two cryptos that have no uncertainty about their legal status and are driving demand for TradFi.”
Last week, blockchain development company Consensys announced that the U.S. Securities and Exchange Commission (SEC) had completed its Ethereum 2.0 investigation, which sought to determine whether the second-largest cryptocurrency by market cap is a security.
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Generated image: Midjourney